A New Jersey-based nonprofit organization was quietly selected earlier this year to run New Castle County's second medical marijuana growing and dispensary operation without competitive bidding, state and organization leaders confirmed Wednesday.

Compassionate Care Research Institute, whose leaders have amassed cultivation and dispensary licenses in New Jersey, Pennsylvania, Maryland and Colorado, is scheduled to open early next year in Newark, company officials said in a statement. They declined to disclose the dispensary's specific location, citing security concerns.

The Delaware Department of Health and Social Services finalized the two-year contract in May without soliciting competitive bids, as it did for its three previous dispensary licenses.

Delaware's Medical Marijuana Law, enacted in 2011, stipulates that state health leaders use "an impartial and numerically scored bidding process" to license at least one dispensary in each of the state's three counties.

But the law also allows the department to bypass state procurement rules and issue "additional registration certifications to at least three of the highest-scoring applicants." Compassionate Care Research Institute previously applied for licenses in both Kent and Sussex counties, but lost out to other vendors.

Division of Public Health spokeswoman Emily Knearl said Wednesday that state health officials have no plans to issue additional licenses.

"There are delays and additional costs involved if going out to a new competitive bid ...," she said in an email. "We look forward to CCRI operating a new compassion center in NCCO and have been impressed when working with them and their staff."

Through Knearl, Medical Marijuana Program Administrator Paul Hyland and Public Health Director Karyl Rattay declined a request for a phone interview Wednesday. At The News Journal's request, Knearl said the department would provide its contract with CCRI pending legal review.

House Majority Whip John Viola said he welcomes another medical marijuana outlet, after hearing complaints from constituents about product shortages and high costs at New Castle County's sole dispensary in Newport, which is operated by First State Compassion Center.

Participation in Delaware's medical marijuana program has exploded, increasing by more than 480 percent from fiscal 2015 to 2016, according to state statistics. Last year, the state issued 1,550 medical marijuana cards to adult patients, children, guardians and caregivers.

"It absolutely should be competitively bid,"Viola, a Newark Democrat, said of CCRI's contract, "but I don't know how long that process takes from beginning to end. It seems that the need was much greater than the supply."

First State also runs a second dispensary in Lewes, which opened in May. Company president Mark Lally is a lobbyist, former state trooper and former aide to U.S. Sen. Tom Carper.

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Mark Lally is president and CEO of First State Compassion Center, with locations in Newport and Lewes.(Photo: The News Journal)

Delaware's third dispensary is slated to open this fall in Kent County, although an exact location has not been disclosed. It will be operated by New York-based Columbia Care, a leading national medical marijuana provider that operates 20 dispensaries in six states and Puerto Rico.

Newark cannabis entrepreneur Kelly Williams, who owns a workforce development firm called Noble Territory, said she would have appreciated an opportunity to bid on the second county contract.

"I don't want to walk away from anything in this industry," Williams said.

The state Health Department still hasn't made available to the public all the applications submitted for the Sussex or Kent dispensaries, she noted.

Health Department officials say they are permitted to withhold this information under the Medical Marijuana Law, which specifically exempts the proposals from the Delaware Freedom of Information Act.

New kid in town

Compassionate Care Research Institute also operates the nonprofit Garden State Dispensary in Woodbridge, New Jersey, which is among the largest of the state's five dispensaries. Company leaders are involved in separate for-profit limited liability corporations, Franklin Labs in Pennsylvania and CannaPharmacy Maryland.

CCRI "will breathe new life into the state's clinically oriented medical marijuana program and offer safe, secure and compassionate relief to suffering patients while creating good-paying jobs in Newark," Delaware company Chairman Dennis Klima said in a statement. Klima is a retired president and CEO of Bayhealth Medical Center in Dover.

Other prominent local company directors are Maj. Robert Becker, former deputy chief of the New Castle County Police Department, and Bob Stickels, former Sussex County administrator, Dewey Beach town manager and Georgetown town manager.

The national leadership team includes Paul Higdon, a retired federal drug enforcement special agent and deputy assistant administrator who went on to serve as INTERPOL's director of criminal intelligence; John Hanger, former secretary of policy and planning for Pennsylvania Gov. Tom Wolf; father-son team Michael and David Weisser, who run eight nonprofit medical marijuana clinics in Colorado. Yale Galanter, a celebrity attorney for O.J. Simpson and Charlie Sheen, has served as a company spokesman for previous projects.

New Jersey Assemblyman Raj Mukherji, a health care lawyer and former lobbyist, helped draft Garden State's winning application before joining the state Legislature. New Jersey more than doubled its cannabis sales last year to nearly 2,800 pounds, according to state Health Department statistics.

More competition in New Jersey has helped knock down the average price of medical marijuana, from $489 an ounce to about $300, according to a Philly.com report last year.

Delaware dispensaries do not make prices public. But patients buying from Delaware outlets told The News Journal that it costs about $476 per ounce, noting that the product is typically available only in one-eighth of an ounce packets.

Mukherji, who is still involved in the company, declined to disclose Compassionate Care Research Institute's proposed pricing structure in Delaware. But with more competition, he said, "it would be fair to assume that pricing in Delaware would drop to New Jersey levels."

CCRI plans to offer more than 20 strains of product, hire a pharmacist to counsel patients and create 25 to 40 jobs over the next two years, Mukherji said.

Delaware campaign finance records show that CCRI leaders donated a total $4,800 to Gov. John Carney last year.

The contributions weren't related to CCRI's dispensary application, said Mukherji, a Democrat who organized the purchase of tickets to a Carney fundraiser featuring former Vice President Joe Biden.

Carney "was a great congressman and I thought he'd make a good governor," Mukherji said.

Knearl said politics didn't factor into the Health Department awarding dispensary licenses. Those decisions were made by a review committee consisting of seven state employees from the Health and Social Services, Agriculture and Homeland Security departments.

"Neither the current or former Governor's offices ever weighed in on the selection of the vendors," she said.